Continued Slow Growth Ahead For Retail Stores

October 28, 2013

Apple’s retail stores turned in respectable revenues and profits for fiscal 2013, but the results haven’t encouraged the company to accelerate expansion of the chain during the year ahead. During a conference call this afternoon announcing the company’s financial results, Apple CFO Peter Oppenheimer said the company will open “about 30″ retail stores in fiscal 2014, including about two-thirds outside the United States. Those figures are in line with the rate of expansion over the past two years. In fiscal 2008 Apple opened a record 47 new retail stores, but began turning down the dial on retail expansion as the United States economic crisis widened. In 2009 Apple opened just 31 stores, and then in both 2010 and 2011 they opened 40 stores respectively. Grand openings dipped to 34 in 2012. During fiscal 2013, just 27 new stores opened according to Apple, although another three existing stores moved into new stores at different locations. As for financial results, the retail chain generated $20.2 billion in revenue for the FY2013, a new record, with a profit of $4.0 billion. Oppenheimer revealed that sales of iPhones was “very strong” during the quarter, with unit sales up 36 percent per store per week compared to the same quarter of 2012. Overall, Apple reported record annual revenues of $170.9 billion, with a profit of $37.0 billion. Executives said the retail stores hosted 99 million visitors during the latest quarter, and generated about $10.9 million in revenue per-store. View the latest quarterly and annual financial results for more insights.

In opening remarks to financial analysts during a conference calls, CEO Tim Cook was particularly upbeat about the company, including its financial results, array of new products, and for Apple’s non-business endeavors. “We are also proud to be a force for good in the world beyond our products,” he said, “whether its improving working conditions of the environment, standing up for human rights, helping eliminate AIDS or reinventing education, Apple is making substantial contributions to society.”

Cook pointed out that the recent iPhone 5s/5c launch included China on day-one for the first time. He added that “Greater China” (Hong Kong and China) generated over $27 billion in sales, up 14% year-over-year. In response to an analyst’s question, he said, “So we are continuing to invest in stores. We opened one additional store in Greater China in the last few weeks. We’re investing in indirect distribution.” He said Apple’s points-of-sale (resellers) are up by about 50 precent year-over-year for the iPhone, and the company continues to expand them. “Initially we were very focused on just the large cities,” he said, “and so we’re working on both coverage on launching earlier and execution and continuing to build on our retail practice there.”

The number of Apple store grand openings peaked in 2008, and has been declining almost ever since.